Unions hailed the action as a massive success. The national strike isPortugal's first since 2007, and the first called jointly by the two bigtrade union confederations, CGTP and UGT, in 22 years.

Incoming and outgoing flights were cancelled in Lisbon, Porto, Faro andthe Azores islands, the airport authority ANA said. In neighbouring Spain,the airport authority AENA said 41 of the 53 flights between Spain andPortugal were cancelled. Most counters were closed at Lisbon airport.

More than 70% of scheduled train connections were cancelled in themorning, the rail operating company CP said. Most Lisbon buses did notcirculate, and ferries did not operate on the River Tagus in the morning.The Lisbon underground remained closed, and 90% of Porto undergroundengine drivers had reportedly joined the strike.

Ports remained closed, rubbish collection and postal services came to analmost complete halt in many places, while many hospitals and healthcentres were only offering minimum services, according to union sources.Several large factories in the car and shipbuilding sectors reportedlycame to a standstill.

Meanwhile, the police denied union accusations that they had violentlydispersed post office pickets in the capital.

The government, however, sees its spending cuts and tax hikes asindispensable for Portugal to restore the confidence of financial marketsand to put its finances in order. Socrates' budget was due to be given thedefinitive green light by parliament this week. The budget slashes publicsector wages by five per cent, freezes pensions, and raises value addedtax from 21 to 23 per cent. The government wants to cut the budget deficitfrom an expected 7.3 per cent this year to 4.6 per cent in 2011. Thedeficit would then be trimmed below the EU limit of 3 per cent by 2013.

Lisbon is trying to reassure markets concerned that Portugal might need aninternational bailout similar to those requested by Greece and Ireland.Portugal's unemployment rate climbed to a record 10.9 per cent in thethird quarter.